Recent studies have shown President Trump’s tariffs act as a tax on U.S. consumers and businesses, not foreign exporters as he’s been claiming.

As it stands, U.S. consumers wear up to 43% of tariffs, with the rest on U.S. firms.

This aligns with research from Goldman Sachs, who estimated U.S. entities paid 84% in October 2025, projecting that consumers alone absorb 67% by July 2026.

The Kiel Institute, analyzing $4 trillion in shipments (2024–Nov 2025), concluded foreign exporters absorb only ~4%, with 96% passed to U.S. importers/consumers.

Tariffs ultimately reduce consumer buying power and raise costs to businesses, threatening growth since these drive ~85% of GDP.

Shifting our focus to the market, the S&P 500’s CAPE ratio hit ~39.9 in January 2026, the 4th straight month above 39. The last time this happened was during the 2000 dot-com crash.

Historically, these levels precede poor returns, with averages of 0% over 6 months, -4% in 1 year and -20% over 2 years.

High valuations plus tariff risks signal caution for all investors. But it doesn’t mean pull your money out of the market. It just means you need to be more selective with what you’re holding.

My advice: trim low-conviction stocks, build a cash position and avoid chasing short-term volatility.

Long term, the S&P 500’s historical performance of 8-10% proves that patience pays.

But its your job to make sure you can withstand the volatility in the short term.

Your next step: Join the Profit Zone Premium where I provide strategies to make money in the stock market no matter which was it’s moving. We don’t care if the market is up or down, we make money regardless. Click here.

If you’re in your 20s or 30s, time is your ultimate superpower in the stock market.

Forget chasing meme stocks or trying to time the next big crypto pump. Those strategies will have you losing more money than you make, ultimately leading you to think investing “isn’t worth it”.

But here’s the kicker: those strategies aren’t investing, they’re gambling.

Instead, building a dividend snowball is the smart and steady path to passive income that grows exponentially over decades.

And I’m not saying go all-in on dividend stocks.

I would never be 100% invested in dividend stocks, even if I was 60+ years old.

What I’m saying is to allocate some of your invested capital towards building a stream of passive income. How you allocate it is up to you.

Imagine starting with small monthly investments, reinvesting those dividends and watching your portfolio compound into a wealth machine by 40. That’s what I’m striving for.

This isn’t just “hype”, its math, and today I’m going to show you why.

There’s a reason one of the smartest individuals to ever walk the planet said that compound interest is the 8th wonder of the world.

It isn’t something we should take lightly either. It’s a powerful force that can enable you to touch wealth you otherwise never would have thought was possible.

When you buy dividend-paying stocks, companies send you cash (every quarter and sometimes every month/week) for just holding shares.

Instead of spending it on yourself (as some do), reinvesting those payouts to buy more shares through Dividend Reinvestment Plans (DRIPs) creates a snowball effect.

➡ more shares means more dividends
➡ more dividends buys more shares
➡ the cycle continues

You get my drift?

Over 20-30 years, this turns linear contributions into exponential wealth. Emphasis on the exponential, because that’s what we’re after.

Because in the end, you can’t save your way to wealth, but you sure can invest your way to wealth.

Think of it like a tiny snowball rolling down a hill. As it continues to roll, it picks up speed and size, without any extra effort from you.

The below chart emphasizes the important of dividends as it relates to total return, showing dividends contribution to total return by decade. As you can see, dividends make up a significant chunk of the returns in the S&P 500 every 10 years.

Below highlights the impact of dividend growers/initiators vs. other stocks that either don’t grow dividends, don’t pay dividends or cut dividends. The return of dividend growth/initiators over a 50 year period (1973-2024) is hard to ignore.

If you’re a beginner, focus on dividend sustainability and long term growth.

Look for “dividend aristocrats” or take it a step further and look for the “dividend kings”.

Both provide predictability of cash flow, which is what your goal should be if you’re trying to build a dividend portfolio.

On the flip side, you can start with ETFs like SCHD (Schwab U.S. Dividend Equity ETF) if picking individual stocks feels overwhelming; it yields around 3.5% with built-in growth.

DRIP is your secret weapon for hands-off compounding.

Most brokers offer free DRIP, automatically using your dividends to buy fractional shares. No fees and no market timing required, just automation, making reinvesting mindless and simple.

Let’s say you decide you want to invest $100/month into a brand new dividend portfolio.

Assuming an 8% average return including reinvestment, after 20 years (age 20 to 40) your total contributions are $24,000. However with an average dividend yield of 3%, your contributions grew to ~$57,000. That’s over $33,000 in gains from reinvestment and growth.

But here’s where it gets better.

Now you have a $57,000 portfolio that yields an average of 3% (moderate yield).

That portfolio is now paying you $1,710/year in passive income, without you having to touch the principle. Keep this rolling for another 10-20 years and that amount only grows further.

Now I know what you might be thinking… $1,710/year in passive income is NOTHING DD!

You’re right… and the solution is to invest more.

The example uses a monthly contribution of $100/month ($1,200/year). If you can find a way to invest $500/month, you can only imagine what kind of numbers that will yield.

Start small. Don’t over contribute off the hop. Take some time to ease into building a dividend portfolio and increase your contributions as you go.

Open a brokerage account and set up auto-reinvestment (DRIP).

Track your progress with apps like Snowball Analytics. Use code “dividenddomination” for 10% off your plan.

For deeper strategies, like learning how to analyze and pick undervalued dividend growers, join The Profit Zone Premium. Inside, you'll get exclusive insights on building and scaling your snowball (with stock picks), the ability to ask me questions directly, and see my real-time buys and sells to replicate proven moves.

By age 40, your snowball could fund trips, side hustles, or early retirement.

Start today, the hill is waiting.

Stay dominant. Stay invested.

Alex (The Dividend Dominator)
Founder and CEO of Dividend Domination Inc.
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